I think they added this functionality in 2008 or so, not exactly sure when though. Give it a shot- much better as it gives you complete control in one command. Here are brief instructions:

In SolidWorks, start a new sketch. Use the Tools>Sketch Tools>Sketch Picture command to drop the image into the sketch. Next, insert the image directly into the sketch, drag to position and resize as needed (you can accurately size the sketch to construction lines drawn within SW). On the Property Manager, go to Transparency>Full Image and slide the bar to the right for desired transparency. I like to exit the sketch and start a new sketch for tracing so I don't inadvertently move the inserted image.

big problem is that the pic has very ruff edges/pixel that doen't lend itself to a very clean trace. here is one i did in corel draw to me 10 min and this is the finest detail i could get because of the pixels.